Project Energy Reimagined Acquisition Corp. (PEGR) to Combine with Heramba Electric in $450M Deal
by Nicholas Alan Clayton on 2023-10-03 at 11:11am

Project Energy (NASDAQ:PEGR) has entered into a definitive agreement to combine with Heramba Electric at a pro forma enterprise value of $450 million or 3.75x its 2022 revenue.

Berlin-based Heramba Electric is to provide charging and electrification equipment to commercial and civil transit vehicles.

The combined company is expected to trade on the Nasdaq once the deal is completed in the first quarter of 2024.

Transaction Overview

Project Energy has about $113 million in its current trust having seen 58% of its shares redeemed in an extension that pushed its deadline to May 2, 2024. It has not yet supplemented this with additional outside funding.

Closing is conditioned upon Heramba completing its acquisition of Kiepe Electric. Heramba announced the transaction to carve Kiepe out of Knorr-Bremse (DE:KBX) in August and the parties expect it to close in the fourth quarter.

Project Energy has not yet released its merger documents or an investor presentation, but its profile page will be updated once additional information is made available.

Quick Takes: This deal is special in the sense that it brings together two different special purpose companies, although Heramba is not a listed vehicle like Project Energy.

The private acquisition company has offices in both Germany and the US and has been itself seeking a target that would help decarbonize commercial transportation since its founding in January 2023. Project Energy has meanwhile been on the hunt since October 2021.

That timing is somewhat interesting, as Knorr-Bremse has been shopping Kiepe since at least late last year, according to its 2022 annual report. At the time, it did not break out Kiepe’s revenues from the rest of its divisions, but it noted the subsidiary accounted for about €170 million in assets ($177 million) and €155 million in liabilities ($162 million).

Knorr-Bremse said in the report that it was hoping to complete the sale in the first quarter of this year, but it evidently wasn’t able to get that finalized. Nonetheless, it means that the division was available for quite some time presumably without coming onto Project Energy’s radar.

Instead, Heramba swooped in and nailed down the acquisition in August. This of course begs the question what value Project Energy investors will derive from Heramba’s involvement here.

In theory, the Heramba team set the valuation for the division and its executives can advise on the strategies for the flip of the carve-out before taking it to the public markets, but isn’t that what the SPAC’s role would normally be?

Heramba’s only listed officer is Managing Director Hans-Jörg Grundmann, whose past experience includes leading Siemens Mobility, and he is expected to run the combined company after the two mergers take place.

One way or the other, Kiepe had been a part of Knorr-Bremse’s Rail Vehicle Systems (RVS) group, which has been responsible for a little under half of the conglomerate’s revenue. The RVS group generated about $1.9 billion in the first half of the year and $155 million in EBITDA.

But its margins have been dropping, so Knorr-Bremse has been targeting the RVS group with its disposals and optimization for several quarters running. It also shut down a foundry in the US and exited its RVS business in Russia over the past year.

Kiepe’s piece of the puzzle has been to manufacture electric drives and vehicle controls for transit vehicles as well as their associated charging stations and hardware. It seems to have made its name in recent years for its High Power Charging platform that enables fast-charging, in-motion charging and energy management systems for electric buses.

But, with the numbers of SPAC deals involved in EVs and charging infrastructure, the parties may have to put out some more information on this combination within a combination to stave off skepticism.

They have noted that Kiepe generated an impressive $120 million revenue in 2022, but they have not mentioned profitability or how well the company will continue to maintain its existing order flow separate from its current parent company.

Kiepe is also valued at more that double its parent under this deal’s terms – at 3.75x revenue while Knorr-Bremse trades at 1.15x. The dynamics of the Nasdaq are different from the foreign exchanges, of course, but Toronto-listed rail hardware peer Bombardier (TO:BBD-B) trades at a similar 1.5x revenue.


    • Heramba Advisors:
      • Latham & Watkins LLP, Matheson LLP and Smith, Gambrell & Russell, LLP are acting as legal counsels
    • SPAC Advisors: 
      • Piper Sandler & Co. and Cohen & Company Capital Markets, a division of JVB Financial, LLC, are acting as lead financial advisors and lead capital markets advisors
      • Northland Securities, Inc. is acting as fairness opinion provider to PERAC’s Board of Directors
      • Greenberg Traurig LLP and Maples Group are acting as legal counsels
Recent Posts
by Nicholas Alan Clayton on 2023-11-24 at 7:35am

At the SPAC of Dawn Though perhaps stuffed to the brim, SPAC activity continues this Thanksgiving Friday with votes by Clean Earth and Zalatoris to extend a deadline and amend trust contributions, respectively. At least seven de-SPACs are also reporting earnings today and will do so going into a futures market that is mostly green...

by Marlena Haddad on 2023-11-22 at 9:45am

IB Acquisition Corp. submitted its S-1 filing Friday afternoon for a $100 million IPO, coming right on the heels of Bayview Acquisition Corp, which also filed its S-1 that day. IB is also similar to Bayview in that its units do not feature a warrant but include 1 right for 1/10. However, its trust is slightly...

by Nicholas Alan Clayton on 2023-11-22 at 8:53am

Integrated Wellness (NYSE:WEL) announced in an 8-K filing that it agreed to transfer control of its sponsor to Sriram Associates, which will now take on the SPAC’s financial obligations and may appoint a new team. Sriram is acquiring 2,012,500 promote shares (70%) and 4,795,000 private placement warrants (70%) for the nominal purchase price of $1....

by Nicholas Alan Clayton on 2023-11-22 at 7:45am

At the SPAC of Dawn So far, seven SPACs have announced their liquidations this week and although some others may choose to use the holiday to quietly disband, this tends to be a positive week for equities in general. Going back to 1961, the S&P 500 has ended the Thanksgiving week with gains three-quarters of...

by Marlena Haddad on 2023-11-21 at 5:55pm

Marti Technologies, Inc. (NYSE:MRT), which merged with Galata Acquisition Corp. in July, announced this afternoon that it has launched an exchange offer to purchase its Class A ordinary shares for $0.10 in cash. The company is also soliciting consents to amend the warrant agreement to redeem each warrant that is not tendered in connection with...


Copyright © 2023 SPACInsider, Inc. All Rights Reserved